Property Valuation
The income approach to valuation is LEAST appropriate for which type of Nebraska property?
AApartment complex
BShopping center
COwner-occupied single-family home✓ Correct
DOffice building
Explanation
The income approach is least appropriate for owner-occupied single-family homes because they are not typically purchased for income. The sales comparison approach is most applicable, though income approach may be used as a secondary check.
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Key Terms to Know
Capitalization Rate (Cap Rate)
A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
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